EVI Industries — First Fiscal Quarter 2027 Earnings Summary

Financial Performance:

• Consolidated revenue increased 4.3% year-over-year to a record $112.9 million.
• Gross profit increased 12% to a record $38.0 million, with gross margin expanding from 31.3% to 33.7%.
• Operating income increased 75% to a record $6.2 million.
• Net income increased 108% to a record $3.8 million, with net income margin expanding from 1.7% to 3.4%.
• Adjusted EBITDA increased 47% to a record $9.9 million, with adjusted EBITDA margin expanding from 6.2% to 8.8%.
• Operating cash flow increased to $7.8 million from $1.0 million in the prior-year period.
• Net debt increased to $76.7 million at September 30, 2026, from $44.2 million at June 30, 2026.
• Commercial Laundry Segment operating income increased 38% to $11.3 million (10.2% of segment revenue).
• Commercial Laundry Segment EBITDA increased 33% to $13.4 million, with EBITDA margin expanding from 9.3% to 12.1%.
• Garment Care Services Segment reported operating income of $0.1 million and EBITDA of $0.3 million in its first month of operations.

Guidance and Future Outlook:

• Management maintains a long-term objective of achieving double-digit consolidated operating margins.
• Progress toward margin expansion depends on higher productivity, increased contribution from service activities, disciplined expense management, and a larger earnings base.
• Management expects investments in people, processes, and technology to be leveraged across a larger revenue base as the company grows.
• The company intends to develop the consumer garment care services division deliberately, prioritizing strong foundations and disciplined integration over rapid size increases.
• Management expects investments in back-office personnel and support functions for the new division to be absorbed over time as the division scales.

Business Segments and Product Lines:

• Commercial laundry revenue grew 2.9% year-over-year, led by parts, service, and installation activities.
• Consumer garment care operations contributed approximately $1.6 million in revenue during the first month following the acquisition of Sudsies, Inc. on September 1, 2026.
• Service revenue and service gross profit increased significantly compared to the prior-year quarter.
• Customers are increasingly selecting higher-capacity equipment, often choosing fewer, larger machines to meet capacity needs.
• The equipment order backlog increased compared to June 30, 2026.
• Field service operations completed approximately 31,000 appointments for nearly 12,000 unique customers during the quarter.
• EVI acquired West Palm Beach, Florida-based Commercial Laundry Equipment ("CLZ") following the end of the quarter, adding 18 employees and expanding presence in Florida.

Market and Competitive Landscape:

• The consumer garment care market is described as fragmented with recurring customer needs.
• Management believes EVI's model of pairing local customer relationships with shared technology, training, and analytical capabilities is difficult to replicate in the industry.
• The company serves hotels, hospitals, healthcare facilities, laundromats, and industrial laundries, relying on long-term customer relationships for equipment maintenance and replacement.
• EVI operates a national field service network supported by modern enterprise systems, including ERP, field service, and business intelligence tools.

Risks and Challenges:

• Trade policy, tariffs, and supplier costs may affect equipment pricing, product availability, and customer purchasing decisions.
• Cost pressures and project timing may impact results in individual periods.
• Investments in recruiting, development, and technology may moderate near-term margins before reaching full productivity.
• Acquisitions involve risks related to integration, cultural fit, and the ability to realize anticipated strategic and financial benefits.
• Expansion into the consumer garment care services industry carries risks regarding operational success, market size, and the applicability of the buy-and-build strategy.
• Potential risks include supply chain delays, inflation, interest rate increases, and cybersecurity threats.

Management Commentary and Tone:

• Chairman and CEO Henry M. Nahmad emphasized that results reflect the work of employees delivering parts and completing complex installations, which drives customer retention and earnings.
• Management described the quarter as "encouraging" but stated the work is not finished, emphasizing a multi-year measurement of progress rather than single-quarter results.
• The tone reflects patience and discipline, focusing on building a better business through trusted relationships, capable people, and consistent execution.
• Management highlighted the strategic value of the Sudsies acquisition as opening a new chapter in consumer garment care services.

Other Key Points:

• EVI acquired Sudsies, Inc. on September 1, 2026, establishing a new consumer garment care services division.
• Approximately $0.5 million in tariff refunds were received during the quarter, recorded as a reduction to cost of sales.
• The $32.5 million increase in net debt primarily reflected borrowings for the Sudsies acquisition, partially offset by operating cash flow.
• The company has ample liquidity available under its revolving credit facility to pursue acquisition opportunities.
• Cash paid for acquisitions, net of cash acquired, was $37.4 million during the quarter.
• Proceeds from long-term debt were $46.0 million, while debt repayments were $12.0 million.
• Capital expenditures totaled $2.3 million for the quarter.
• The company continues to evaluate potential acquisitions in both commercial laundry and consumer garment care services.